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What is gold used for?


Gold We all know what it is. Gold. We all know that it’s a rare, pretty, and expensive metal. For thousands of years the human race has valued it highly and worked hard to obtain it. But what is it actually used for? The most obvious answer is, of course, jewellery. It accounts for the majority of all usage on the planet. But where is the rest? Locked away in the bank vaults of the world’s richest? Some of it is.

Investment counts for a large amount of gold demand. Although you’d struggle to use it in any shop, it is still considered by many to have an intrinsic monetary value. In fact, many fans of the precious metal would go so far as to argue that gold is the ultimate currency, and they may have a good point.

It has been a long time since money was fixed to the value of gold and the global economy now depends on the circulation of fiat, 'paper' currencies such as the pound, dollar, etc. Despite this, the metal retains its reputation as a monetary commodity and investment in the metal makes up a significant part of global gold consumption.

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Top 10 Gold Reserves by Country

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Gold’s scarcity and beauty make it an incredibly valuable metal and the frequent discovery of ancient gold coins illustrates its eternal link to wealth. This is why so many governments and central banks keep so much of it locked away, making up a healthy percentage of their foreign reserves to protect their finances from the unlikely but possible event that their currencies or financial systems collapse.

As the value of paper money decreases all the time through the persistent printing of cash through strategies such as quantitative easing, gold retains its intrinsic value. This accounts for 17% of all gold above ground and is the third largest use for the precious metal after private investment and, of course, jewellery.

Private investment in gold bullion is a huge industry and is used by many individuals around the world in the same way that banks and governments hold bullion reserves. Investors trust gold to maintain its value and therefore use it as a safe-haven investment in difficult economic or geopolitical times, or simply as a portfolio diversifier to hedge against problems in the future.

As the UK's no. 1 online bullion dealer*, we are very familiar with private investment in gold and other precious metals.

Read our 'Investment Guide' if you would like to know more about investing in gold.

Jewellery and bullion clearly account for the vast majority of global demand. There are, however, plenty of other uses for the precious metal. Despite being famous for its material beauty, it has a variety of more practical uses, which often use tiny quantities of gold to huge effect.


Below we have compiled a list of some of the other industries where gold is used to improve our lives, demonstrating its importance as much more than an attractive piece of jewellery or valuable investment.

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Gold is used in electronic devices Electronic devices

Gold’s effectiveness as a conductor of electricity makes it an incredibly useful material in the manufacture of certain electronic devices, particularly those used in computers and telecommunication appliances. Gold can often be found in battery connections, circuit boards, bonding wires and much more. The electronics industry accounts for more than 300 tonnes of gold demand annually and this is only likely to increase as these and other technologies play increasingly important roles in our lives while more is discovered about gold’s usefulness.

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Gold's use in medecine Medicine

Gold also has a huge application in the world of medicine, and not just as gold teeth. Its resistance to bacteria means that it is extremely useful in the treatment of medical conditions that require implants and is a popular material for the manufacture of stents and pacemakers used to treat heart disease.

As well as allaying the risk of infection through its resistance to bacteria, its excellent detectability under X-ray makes it an extremely useful material in medicine.

Gold nanoparticles have even demonstrated their ability to help combat two of the world’s largest killers; HIV and cancer. Discoveries are frequently being made about the importance of this precious metal to our health and wellbeing.

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Aerospace industry

This is not the only example of gold saving lives. It also plays a huge role in the aerospace industry where, once again, the metal's electrical conductivity is hugely important in keeping aircraft in the air. The precious metal is used in many of the electrical components involved. Perhaps even more importantly, it is used as a protective coating inside aircraft, shielding those inside from potentially dangerous radiation. It is used to the same effect in astronauts’ visors and spacecraft, playing a huge role in allowing us to explore the universe.


These are only a tiny amount of the huge variety of uses of this incredible metal. It has been an attractive and sought-after commodity for years, resulting in the enormous monetary value we attach to it.

Gold's use as a financial asset dates back thousands of years and has now even stretched beyond the possession of physical bullion. The trade of exchange traded funds is a multi-trillion dollar industry that offers investors a way of betting on its price without actually buying any gold. Many investors are attracted to this method due to the lower premiums and the convenience of not having to store their bullion. However, the level of risk involved is considerably higher.

Gold backed ETFs are supposed to be backed by an amount of existing physical bullion, but the purchase of an ETF is not a contract that allocates any one piece of metal to the investor. This means that the investment is essentially only worth the paper it is written on and, although apparently possible, it is not easy for an investor to take delivery of any physical gold. Even then, this is only available to investors with enormous holdings. For investors without multi-million pound budgets who wish to one day have access to their gold, there is only one option- physical, allocated bullion.

Click here to view our range of gold bullion bars.